APL & POL_1QFY22 Result Preview, (AKD Daily, Oct 21, 2021)
AKD Daily
APL & POL_1QFY22 Result Preview
APL to post EPS of PkR16.44 for 1QFY22: Attock Petroleum Limited (APL) is expected to announce its result today for 1QFY22 where we expect the company to post PAT of PkR1.6bn (EPS: PkR16.44), increasing by 10/30%YoY/QoQ. The topline of the company is expected to stand at PkR68.9bn, increasing by 53/30%YoY/QoQ where a confluence of increasing prices and dispatches played a role. To note, APL’s sales volumes witnessed an increase of 23%YoY for 1QFY22 against 24%YoY in industry’s volumes however the real outperformance was witnessed in retail fuel segment where increase for APL stood at 33%YoY against 20%YoY for the industry, taking APL’s market share to 8% for 1QFY22 against 7% for 1QFY21. Prices, on the other hand, improved as oil prices continue their upward march courtesy stronger than expected demand recovery. The same is expected to provide significant uplift to bottomline in the shape of inventory gains where we expect company to record inventory gains of PkR686mn for the quarter. Moving forward, with the oil prices remaining elevated, we expect stable cash flows of the company to result in reversion to high payout ratio (in-line with historical trend) while ongoing progress on infrastructure improvement is expected to continue to yield profits in the shape of improved penetration into retail fuel segment.
POL EPS expected at PkR16.8 during 1QFY22: The board of directors of Pakistan Oilfield Limited (POL) is expected to meet today to announce 1QFY22 results. We expect the company to announce to announce earnings of PkR4.77bn (EPS: PkR16.8), up 31%YoY. The growth in earnings is mostly driven by price related factors as average Arab Light price increased by 8.8%QoQ to US$74/bbl, semi-annual revision in gas prices and a 6.4%QoQ depreciation in PkR/US$ parity more than off-sets year-on-year volumetric decline in production (gas production down 11%YoY, oil production down 10%YoY, LPG production up 3%YoY). Similarly, POL’s exploratory expenses are also expected to nosedive amid little exploration activity during the quarter. We flag POL as a potential outperformer in our E&P space amid its limited exposure to circular debt. At a TP of PkR550/sh, the scrip offers a total return of 52% on the last close
AKD Research
Attock Petroleum Limited is engaged in the procurement, storage and marketing of petroleum and related products. The Company offers a range of lubricants blended with base oils and additives at its Automatic Batch Blending facility. Its products include diesel engine grades, such as GOLD TURBO PLUS, GOLD TURBO, GOLD XTRA and GOLD-50; gasoline engine grades, such as HIDRIVE SUPREME, HIDRIVE SUPER and ATTOCK T-2; industrial grades, such as ATTOCK Hydraulic Oil AW Series, ATTOCK Gear Oil EX Series and ATTOCK TURBINE Oil, and gear oils, which include various specifications, such as EP 140, EP 90, 85W/90 and 85W/140. It has a multi-fuel retail network of approximately 540 retail outlets. The Company's retail outlets also offer compressed natural gas, as well as non-fuel retailing options, such as tuck shops, car services and lubricants. It supplies various types of fuels to various businesses, including manufacturing industry, armed forces, agricultural customers and power producers.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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